Overcoming Barriers for International Trade in an eCommerce World

Overcoming Barriers to International Trade

For an eCommerce World

TRADE

Agenda•Identify the Global Opportunities

•Understand the Barriers to International Trade

•Overcome the Barriers to take advantage of the Global Opportunities

•An Action Plan to Go Global

3

The Opportunity to“Go Global”

Global Internet Population…The Opportunity

5

July 2009 “Global Online Population Forecast, 2008 To 2013”

Asia Will Remain An Online Powerhouse…The Opportunity

6

July 2009 “Global Online Population Forecast, 2008 To 2013”

Steady but Tempered Growth…The Opportunity

7

Rest of

the Worl

d85%

USA15%

Percentage of World Internet UsersSource: Internet World Stats

Global Internet User…The Opportunity

8

September 2009 “Tactics To Attract Recession-Weary Online Buyers Around The Globe”

Cross-Border Purchasing in Europe…The Opportunity

9

21% 22% 23% 23% 24%26% 26% 27% 28%

32%

19%25%

0%

25%

50%

Books

CDs

Event

tick

ets

Appar

el

Train

tick

ets

Holid

ay a

ccom

odatio

ns

DVDs

Footw

ear

PCs

Compute

r per

ipher

als

Sporti

ng good

s

Consu

mer

ele

ctro

nics

Cross-Border Online Buyers…The Opportunity

Question: Which of the following products or services have you purchased online in the past six months? Select all: Products from a Web site in another country, books, CDs, event tickets, DVDs, apparel, train tickets, holiday accommodations, peripherals, consumer electronics, footwear, sporting goods, toys, PCs, and laptops

Perc

en

tag

e o

f C

ate

gory

B

uyers

Wh

o H

ave M

ad

e

Cro

ss-B

ord

er

On

lin

e

Bu

yers

Source: JupiterResearch Consumer Survey (9/07), n = 410 (cross-border online buyers, France, Germany, Italy, Spain, Sweden, and UK), n = 2,356 (online buyers who have not bought across borders, France, Germany, Italy, Spain, Sweden, and UK), n = 4,816 (overall online users, France, Germany, Italy, Spain, Sweden, and UK)

10

11

Online Behavior in Asia…The Opportunity

50%

51%

52%

67%

79%

83%

China Hong Kong

India

China Mainland

Australia

Japan

South Korea

Base: 5,911 Asia Pacific adults who are online at least monthly(multiple responses accepted)

Source: Asia Pacific Technographics® Survey, Q4 2008

“Which of the following Web sites do you regularly visit? By regularly, we mean at least once a month.”

Question: Again thinking of buying products and services online, which of the following statements are true? Select all: I spend more than €50 per month online; I spend more than €150 per month on high street; I am willing to pay more for higher quality or added convenience; I have bought products from a Web site in another country.

Source: JupiterResearch Consumer Survey (9/07), n = 410 (cross-border online buyers, France, Germany, Italy, Spain, Sweden, and UK), n = 2,356 (online buyers who have not bought across borders, France, Germany, Italy, Spain, Sweden, and UK), n = 4,816 (overall online users, France, Germany, Italy, Spain, Sweden, and UK)

Cross-Border Online Buyers…The Opportunity

Online Buyers Who Do Not Buy Across Borders

Characteristics Cross-Border Online Buyers

47% male Gender 62% male

45% Top household income segment 52%

22% Employed in managerial position 30%

75% Frequent Internet users 82%

49% 5 or more years’ online tenure 66%

57% Expect fastest access to any Web site 74%

12% Spend more than €50 per month online 33%

5% Spend more than €150 per month on high street 20%

13% Willing to pay more for higher quality or added convenience

34%

2.6 Number of categories purchased across (mean) 4.5

12

13

Situation

• Only 4% of shipments are cross border, yet…

• 23.5% of Daily Unique Visitors are from outside the United States

Study

• Average Order Value is typically 40% higher than domestic orders

• Conversion Rate is typically ¼ of domestic conversion rate

• Add the ability to convert existing global DUV without added online marketing

• Opportunity to increase revenues by $4.2 million year one.

Results

A Study…The Opportunity

Discussion Point

What is your organization doing to seize the global opportunity?

Barriers to International Trade

•Consumer experience

•Quoting accurate prices and lead times

•Local compliance•Payment and fraud

What is your biggest concern with international orders?• 50% - Customer Experience• 25% - Compliance /

Regulatory Issues• 17% - Unknown Cost• 8% - Payment Fraud

Do you provide any language translation on your web site?• 79% - No• 21% - Yes

Do you accept any “International” forms of payment on your web site?• 77% - No• 23% - Yes

Are you currently accepting international orders from your web site?• 57% - No• 43% - Yes

Survey Results…The Barriers

16

17

March 2006, Trends “Multilingual Sites Drive Cross-Border Sales”

Less-Educated Consumers Need Language …The Barriers

18

March 2006, Trends “Multilingual Sites Drive Cross-Border Sales”

Less-Educated Consumers Need Language …The Barriers

•Shipping•Duty•Insurance•Payment and

collection▫Currency exchange▫Provision for fraud

•Regulatory compliance

How much is that again?…The Barriers

19

20

21

22

Discussion Point

What barriers did your organization have to overcome to Go Global?

Overcoming The Barriers

•Prioritized translation investment

•Localized pricing•Full landed cost•Include estimated

transit time

The Global Solution…The Solution

25

• Deliver and maintain all harmonization / commodity classifications

• Provide full Landed Cost Quote that includes:▫ Cost of Goods▫ Transportation cost (and options)▫ Insurance▫ Duties▫ International Tax (VAT, GST etc.)▫ Clearance Fees▫ Disbursement

• Optimized Logistics Network

Accurate Landed Cost…The Solution

26

•Offer the full spectrum of country-specific payment methods.

Global Payment Methods…The Solution

27

•Maintain commodity classification•Maintain all import and export product

restrictions•Create all international documentation

for import and export compliance electronically filed with carrier

•Country independent▫Ship from any country

to any country

Compliance & Documentation…The Solution

28

Action Plan to Go Global

29

30

Action Plan to Go Global

• Test the water in different markets with limited investments

• Make selective investments in language translation

• Pay more attention to the “overseas persona” and use case

• Recast your online order processes to use deliver crisp pricing in local currency including all landed and delivery costs

• Understand local payment preferences and concern about fraud

• Meet your local compliance obligations• Have fun on your trip

Be a “Tourist before becoming a “Settler…Action Plan

Discussion Point

What other Action Plan has your organization used to Go Global?

Chris ReighleyDirector of eCommerceFillTek

[email protected](937) 302-7308www.tradeglobal.com

Cincinnati AMA International SIG Meeting12/2/2009